Darijo Srna beat Marcell Jansen to poke home a curling cross from the left by Danijel Pranjic in the first half and Ivica Olic tapped the ball in early in the second period after a centre by Ivan Rakitic had struck Lukas Podolski and a post.

Germany pulled one back in the 79th minute through Podolski but Croatia held on for a victory that revived memories of their 3-0 triumph over Germany in the 1998 World Cup quarter-finals, a match that featured their coach Slaven Bilic.

To add to Germany's misery substitute Bastian Schweinsteiger became the first player to be sent off at these finals when he pushed Jerko Leko to the ground in retaliation for a tackle from behind in injury time.

Croatia nearly made it 2-0 when Olic headed down and Niko Kranjcar blasted over.

The Germans went close with a Michael Ballack [Images] free kick and a header from Metzelder that flashed over.

Coach Joachim Loew sent on David Odonkor to add pace on the right and Ballack shot over from the edge of the area.

The second goal had an element of luck about it but it was reward for the excellent attitude Croatia showed and they managed to hold on after Podolski netted his third goal of the tournament for Germany.

Asked why his team failed to build on their opening 2-0 win over Poland, captain Ballack said: "Perhaps we thought we had already achieved something. We played poorer in all areas.

"We knew we were up against tough opponents so that surprises me. It's bitter. Now we have to win the next match (against Austria on Monday)."